U.S. markets were relatively calm Monday as Wall Street entered the home stretch of second-quarter earnings season after a volatile week of trading fueled by recession fears. Trading activity often picks up during the month or so every quarter in which America's largest companies report results. But this past month, especially the last two weeks, has been characterized by abnormal swings in the stock market. Volatility spiked last week to its highest since the onset of Covid-19 after a soft jobs report and ...

Key TakeawaysShake Shack's earnings earlier this week showed its sales surged from a year ago.A number of its burger-selling rivals like McDonald's, however, have struggled with customers pulling back on spending and introduced value meals to drive sales in recent months.Shares of Shake Shack have climbed along with its sales, up 30% from the start of the year through Friday's close, while shares of McDonald's, Wendy's, and Burger King parent Restaurant Brands International slumped.Analysts and Shake Shack ...

Shake Shack Inc. (SHAK) posted decent second-quarter fiscal 2024 results, with earnings meeting the Zacks Consensus Estimate and revenues beating the same. The top and the bottom line increased on a year-over-year basis. During the quarter, the company benefited from product innovations, strategic menu pricing, technology implementations and promotions.Looking ahead, SHAK is committed to achieving efficiency across regions and formats by utilizing drive-throughs and third-party delivery. The company plans t ...

[Part I – FINANCIAL INFORMATION](index=4&type=section&id=Part%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited condensed consolidated financial statements for the period ended June 26, 2024, show total assets increased to $1.66 billion, total revenue for the second quarter grew to $316.5 million, and net income reached $10.4 million, with operating cash flow increasing to $84.2 million for the first twenty-six weeks [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 26, 2024, total assets increased to $1.66 billion, driven by a rise in cash and cash equivalents to $301.8 million, while total liabilities grew to $1.18 billion, primarily due to increases in long-term operating lease liabilities and tax receivable agreement liabilities Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 26, 2024 | December 27, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $301,838 | $224,653 | | Total current assets | $345,680 | $334,432 | | Property and equipment, net | $545,225 | $530,995 | | Operating lease assets | $419,527 | $398,296 | | **TOTAL ASSETS** | **$1,661,758** | **$1,605,857** | | **Liabilities & Equity** | | | | Total current liabilities | $168,088 | $164,067 | | Long-term debt | $246,160 | $245,636 | | Long-term operating lease liabilities | $487,600 | $464,533 | | Liabilities under tax receivable agreement | $246,878 | $235,613 | | **Total liabilities** | **$1,175,393** | **$1,136,487** | | **Total equity** | **$486,365** | **$469,370** | [Condensed Consolidated Statements of Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) For the thirteen weeks ended June 26, 2024, total revenue increased 16.5% year-over-year to $316.5 million, with income from operations more than doubling to $10.8 million, and net income attributable to Shake Shack Inc. rising to $9.7 million, or $0.23 per diluted share Income Statement Summary - Thirteen Weeks Ended (in thousands) | Metric | June 26, 2024 | June 28, 2023 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $316,496 | $271,805 | 16.5% | | Shack Sales | $305,480 | $261,810 | 16.7% | | Income from Operations | $10,782 | $4,748 | 127.1% | | Net Income | $10,382 | $7,223 | 43.7% | | Net Income Attributable to Shake Shack Inc. | $9,668 | $6,948 | 39.2% | | Diluted EPS | $0.23 | $0.16 | 43.8% | Income Statement Summary - Twenty-Six Weeks Ended (in thousands) | Metric | June 26, 2024 | June 28, 2023 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $607,000 | $525,083 | 15.6% | | Shack Sales | $586,032 | $506,064 | 15.8% | | Income from Operations | $10,816 | $1,559 | 593.8% | | Net Income | $12,596 | $5,601 | 124.9% | | Net Income Attributable to Shake Shack Inc. | $11,708 | $5,414 | 116.2% | | Diluted EPS | $0.28 | $0.13 | 115.4% | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the twenty-six weeks ended June 26, 2024, net cash provided by operating activities increased to $84.2 million, investing activities provided $0.4 million, and financing activities used $7.5 million, resulting in a period-end cash balance of $301.8 million Summary of Cash Flows - Twenty-Six Weeks Ended (in thousands) | Activity | June 26, 2024 | June 28, 2023 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $84,210 | $62,191 | | Net Cash Provided by (Used in) Investing Activities | $428 | ($85,415) | | Net Cash Used in Financing Activities | ($7,452) | ($3,596) | | **Increase (Decrease) in Cash** | **$77,185** | **($26,824)** | | **Cash at End of Period** | **$301,838** | **$203,697** | [Management's Discussion and Analysis (MD&A)](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reports a 16.7% increase in Shack sales for Q2 2024, driven by new stores and higher menu prices, with same-Shack sales growing 4.0%, while liquidity remains strong with $301.8 million in cash [Overview and Key Metrics](index=29&type=section&id=Overview%20and%20Key%20Metrics) For Q2 2024, Same-Shack sales increased 4.0%, driven by a 4.8% price/mix increase, while system-wide sales grew 13.5% to $483.7 million, and digital sales, representing 34.4% of Shack sales, increased 20.9% Key Operating Metrics - Q2 2024 vs Q2 2023 | Metric | Q2 2024 | Change vs. Q2 2023 | | :--- | :--- | :--- | | Same-Shack Sales Growth | 4.0% | - | | - Price Mix | 4.8% | - | | - Guest Traffic | (0.8)% | - | | System-wide Sales | $483.7M | 13.5% | | Digital Sales | $105.1M | 20.9% | | Average Weekly Sales | $77,000 | Flat | [Development Highlights](index=30&type=section&id=Development%20Highlights) In Q2 2024, the company expanded its footprint by opening 12 new Company-operated Shacks and 11 new licensed Shacks, bringing the total system-wide Shack count to 547 as of June 26, 2024 - Opened **12 new Company-operated** and **11 new licensed Shacks** in Q2 2024[139](index=139&type=chunk) - Total system-wide Shacks reached **547** as of June 26, 2024 (**311 Company-operated**, **236 licensed**)[140](index=140&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) In Q2 2024, Shack sales rose 16.7% to $305.5 million, primarily from new store openings, with food and paper costs improving to 27.8% of sales, while other operating expenses increased to 14.4% of sales due to higher marketing and delivery costs, leading to a surge in income from operations to $10.8 million Shack Sales Analysis - Q2 2024 | Metric | Amount | % Change YoY | | :--- | :--- | :--- | | Shack Sales | $305.5M | 16.7% | | Contribution from New Shacks | $32.1M | - | | Contribution from Menu Prices | $18.3M | - | Shack-Level Expense Ratios - Q2 2024 vs Q2 2023 | Expense Category | % of Shack Sales (Q2 2024) | % of Shack Sales (Q2 2023) | | :--- | :--- | :--- | | Food and paper costs | 27.8% | 29.0% | | Labor and related expenses | 28.4% | 28.7% | | Other operating expenses | 14.4% | 13.8% | | Occupancy and related expenses | 7.6% | 7.6% | - General and administrative expenses increased **15.4% to $36.3 million** in Q2 2024, primarily due to increased investments in marketing and higher wages to support growth[163](index=163&type=chunk) [Non-GAAP Financial Measures](index=38&type=section&id=Non-GAAP%20Financial%20Measures) For Q2 2024, Restaurant-level profit was $67.1 million, with a margin of 22.0% of Shack sales, and Adjusted EBITDA increased to $47.2 million, with the margin expanding to 14.9% of total revenue Restaurant-Level Profit Reconciliation (in thousands) | Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Income from operations | $10,782 | $4,748 | | **Restaurant-level profit** | **$67,079** | **$54,942** | | Shack sales | $305,480 | $261,810 | | **Restaurant-level profit margin** | **22.0%** | **21.0%** | Adjusted EBITDA Reconciliation (in thousands) | Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Net income | $10,382 | $7,223 | | **Adjusted EBITDA** | **$47,209** | **$37,050** | | Total revenue | $316,496 | $271,805 | | **Adjusted EBITDA margin** | **14.9%** | **13.6%** | [Liquidity and Capital Resources](index=42&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) As of June 26, 2024, the company's primary liquidity sources included $301.8 million in cash and cash equivalents and an undrawn $50.0 million revolving credit facility, with net cash from operations at $84.2 million for the first half of 2024 - Primary liquidity sources are cash from operations and a cash balance of **$301.8 million** as of June 26, 2024[200](index=200&type=chunk) - The company has a **$50.0 million revolving credit facility**, which was undrawn as of June 26, 2024[211](index=211&type=chunk) - Obligations under the Tax Receivable Agreement totaled **$246.9 million**, contingent on future taxable income[203](index=203&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes to its exposure to market risks since its Annual Report on Form 10-K for the fiscal year ended December 27, 2023 - No material changes to market risk exposure have occurred since the 2023 Annual Report on Form 10-K[217](index=217&type=chunk) [Controls and Procedures](index=44&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were ineffective as of June 26, 2024, due to a material weakness in internal control over financial reporting related to state deferred taxes, with remediation efforts actively underway - Disclosure controls and procedures were concluded to be **ineffective** as of June 26, 2024[219](index=219&type=chunk) - The ineffectiveness is due to a material weakness identified in fiscal 2023 related to the calculation of state deferred taxes and related income tax expense[220](index=220&type=chunk) - Remediation efforts are underway, including hiring a new Head of Tax, using third-party consultants, and developing enhanced management review controls[222](index=222&type=chunk) [Part II – OTHER INFORMATION](index=46&type=section&id=Part%20II%20%E2%80%93%20OTHER%20INFORMATION) [Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various legal proceedings in the ordinary course of business, which are generally covered by insurance, and as of June 26, 2024, the ultimate liability from these matters was not considered material - Information regarding legal proceedings is incorporated by reference from Note 13 of the financial statements[225](index=225&type=chunk) [Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended December 27, 2023 - No material changes to risk factors have occurred since the 2023 Annual Report on Form 10-K[226](index=226&type=chunk) [Other Information](index=46&type=section&id=Item%205.%20Other%20Information) On August 2, 2024, the company amended the employment agreements for CEO Robert Lynch and CFO Stephanie Sentell to correct the maximum bonus opportunity, aligning them with previously agreed-upon terms - Employment agreements for CEO Robert Lynch and CFO Stephanie Sentell were amended on August 2, 2024, to correct the maximum bonus opportunity calculation[227](index=227&type=chunk) [Exhibits](index=47&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including amendments to executive employment agreements, certifications by the CEO and CFO, and XBRL data files - Key exhibits filed include amendments to the employment agreements for Robert Lynch (Exhibit 10.2) and Stephanie Sentell (Exhibit 10.4)[228](index=228&type=chunk) - Certifications from the Principal Executive Officer (31.1) and Principal Financial Officer (31.2) pursuant to Section 302 of the Sarbanes-Oxley Act are included[228](index=228&type=chunk)

The broader stock market is causing investors a little pain to start the month of August, as the S&P 500 is declining by as much as 0.75%. The NASDAQ is lowering by over 1%, despite the Federal Reserve (the Fed) announcing that an interest rate cut is on the table for September 2024 and the CME’s FedWatch tool pricing in an over 90% probability of this happening; markets are selling off.Shake Shack TodaySHAKShake Shack$102.41 +14.79 (+16.88%) 52-Week Range$52.79▼$111.29P/E Ratio186.20Price Target$99.26Add t ...

Key TakeawaysShake Shack beat quarterly profit and sales estimates on higher prices.The burger-and-milkshake chain reported same-store sales up 4%, higher than expected.Shake Shack predicted it would have positive free cash flow for the year, the first time since 2017. Shake Shack (SHAK) shares skyrocketed after the company posted better-than-anticipated results and gave an upbeat forecast as it benefited from higher prices.  The burger-and-milkshake chain reported second-quarter adjusted earnings per share ...

Shake Shack Inc. (NYSE:SHAK) Q2 2024 Earnings Conference Call August 1, 2024 8:00 AM ET Company Participants Michael Oriolo – Vice President, FP&A and Investor Relations Rob Lynch – Chief Executive Officer Katie Fogertey – Chief Financial Officer Conference Call Participants Brian Mullan – Piper Sandler Lauren Silberman – Deutsche Bank Brian Vaccaro – Raymond James Michael Tamas – Oppenheimer & Company Andrew Charles – TD Cowen Christine Cho – Goldman Sachs Brian Harbour – Morgan Stanley Peter Saleh – BTIG ...

Core Insights - Shake Shack reported a strong Q2 2024 performance with a revenue increase of 16% year over year to $316 million, surpassing management's guidance and analyst expectations [2] - The company opened 12 new company-owned restaurants and 11 licensed locations, contributing to growth alongside a same-store sales increase of 4% [2] - Operating income for Q2 was nearly $11 million, a significant rise from less than $5 million in the same quarter last year [2] - Management anticipates generating approximately $1.24 billion in full-year revenue, reflecting a growth rate of at least 14% [3] - Shake Shack is on track to achieve positive free cash flow for the first time since 2017, which is a positive indicator for investors [2] Financial Performance - Q2 revenue reached $316 million, marking a 16% increase year over year [2] - Operating income improved to nearly $11 million, compared to less than $5 million in Q2 of the previous year [2] - The company expects to generate full-year revenue of about $1.24 billion, indicating a growth rate of at least 14% [3] Market Position - Shake Shack's stock rose nearly 18% following the Q2 earnings report, reflecting positive investor sentiment [1] - The company has seen a stock price increase of almost 40% year to date, suggesting strong market performance [3] - Despite positive growth, the operating margin for Q2 was only 3%, indicating potential vulnerability to market headwinds [3]

SHAKE === SHACK® Second Quarter 2024 Shareholder Letter GET LOST IN OUR BBQ SAUCE Bite into something tangy-sweet with the Carolina BBQ Burger or keep it classic with our Smoky Classic BBQ Burger. Q2 2024 HIGHLIGHTS BUSINESS OVERVIEW SECOND QUARTER 2024 HIGHLIGHTS: • Total revenue grew 16.4% year-over-year to $316.5m. • Shack sales grew 16.7% year-over-year to $305.5m. • Licensing revenue grew 10.2% year-over-year to $11.0m. • System-wide sales grew 13.5% year-over-year to $483.7m. • Average weekly sales (A ...

Company Performance - Shake Shack reported quarterly earnings of $0.27 per share, matching the Zacks Consensus Estimate, and an increase from $0.18 per share a year ago [1] - The company posted revenues of $316.5 million for the quarter ended June 2024, exceeding the Zacks Consensus Estimate by 0.85% and up from $271.81 million year-over-year [1] - Over the last four quarters, Shake Shack has surpassed consensus EPS estimates three times and has topped consensus revenue estimates three times as well [1] Stock Movement and Outlook - Shake Shack shares have increased approximately 18.2% since the beginning of the year, outperforming the S&P 500's gain of 15.8% [2] - The sustainability of the stock's price movement will largely depend on management's commentary during the earnings call [2][3] - The current consensus EPS estimate for the upcoming quarter is $0.22 on revenues of $315.07 million, and for the current fiscal year, it is $0.75 on revenues of $1.25 billion [4] Industry Context - The Retail - Restaurants industry, to which Shake Shack belongs, is currently ranked in the bottom 37% of over 250 Zacks industries, indicating potential challenges ahead [5] - Another company in the same industry, Potbelly, is expected to report a quarterly earnings decline of 28.6% year-over-year, with revenues projected to be $119 million, down 6% from the previous year [5][6]